SafeWork NSW v Epic Machinery Pty Ltd

THE INCIDENT

1. On 17 August 2018, Mr Mueller was using a metal cutting machine known as the 'Metal Master four-metre guillotine' ('the machine') at Epic's factory workshop in Picton ('the site'). Mr Mueller was using the machine to cut sheet metal. It was a shearing guillotine.
2. In order to operate the machine and cut metal, he needed to depress a portable foot pedal. Mr Mueller turned away from the machine to locate the foot pedal, and then moved the pedal toward himself. As he turned back around to the machine, the machine activated and the ram and blade then descended, crushing four fingers on Mr Mueller's right hand and the tips of the first and second fingers on his left hand.
3. Mr Mueller alerted Mark Azzopardi to the incident and a contract worker at the site, Robert Hestelow ('Mr Hestelow'), assisted Mr Mueller to the hospital.
4. As a result, Mr Mueller had four fingers amputated on his right hand and the tips of his first and second fingers of his left hand were crushed. He was 33 years old at the time of the incident.

SYSTEMS OF WORK PRIOR TO THE INCIDENT

1. The machine had been traded into Epic around mid-2017 and had been undergoing some repairs at the site. It was not generally intended for use in the course of work being done at the site.
2. However, Mr Mueller had not been prevented from using the machine, either by adequate supervision or otherwise. Mr Mueller had not used the machine previously.
3. The front blade guard of the machine had been removed from the machine for the purposes of enabling inspection and repair. The guard had been off the machine for an unspecified time and both Epic and Mark Azzopardi were aware that it had been removed from the machine, thereby exposing the ram and the blade.
4. There was no prohibition in place on the use of the machine while it was unguarded. The machine was not locked out from the power supply and was able to be plugged into one of the power sockets situated nearby. There was no signage, locks, or chains on the machine to prevent workers from operating it while it was unguarded.
5. No risk assessment had been conducted for use of the machine while it was unguarded, or at all.
6. There was no safe work method statement or safe work procedure in place for the use of the machine while it was unguarded, or at all.
7. There was no supervision put in place to prevent the use of the machine while it was in an unguarded state.

GUIDANCE MATERIAL

1. The defendant had available to it the guidance material including but not limited to: SafeWork NSW Code of Practice, Managing the risk of plant in the workplace (July 2014), which deals with the guarding of machinery and specific control measures for risks of plant; and, Australian Standard, AS 4024 (Series) Safety of Machinery, which provides guidance on reducing the risks to health and safety associated with machinery, including the specific requirements for design and construction of guarding and the importance of conducting risk assessments.

SYSTEMS OF WORK AFTER THE INCIDENT

1. Within a few hours after the incident, Epic replaced the guard on the machine. The guard was secured with bolts using an Allen key.
2. After the issuing of an improvement notice by SafeWork NSW, Epic ceased to use or allow the use of the machine.
3. Epic posted signage on the machine to ensure it was not used by workers at the site. The machine was locked out from the electricity supply.
4. Epic installed a chain with a sign stating 'Authorised Admittance Only' across that part of the site where the machine was located.
5. In September 2018, Epic developed a risk audit plan.

SENTENCING

1. The penalty to be imposed must be one which will give overall effect to the policy of the Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the Act.
2. The Court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act') which include: 1. Section 3A which sets out the purpose of sentencing; 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; and 3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.
3. The court is to approach a sentencing exercise on the basis of it being one of 'instinctive synthesis': Markarian v The Queen (2005) 228 CLR 357.
4. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way: 'The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.'

OBJECTIVE SERIOUSNESS OF THE OFFENCE

1. The duties of the defendant require that it ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the defendant had control and influence over the workers at the site. The duty requires the identification of risks in the workplace and an assessment of measures to address such risks.
2. The primary factor to be assessed is the objective seriousness of the offence. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474-5.
3. The gravity of the offence is determined by the extent of the duty holder's failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling v The Queen (2012) 35 VR 399 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) (1988) 164 CLR 465.
4. Although the gravity of the risk, degree of foreseeability of the risk and the ease of implementation of remedial measures are relevant to the assessment of objective seriousness, I am not limited to taking into account such factors.
5. The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 ('Capral Aluminium') at [81].
6. An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117.
7. Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at [31].
8. The Court of Criminal Appeal examined the sentencing process with regard to the Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 ('Nash v Silver City'). Justice Basten at [34], under the heading 'Assessment of Risk' said: 'The sentencing judge commenced his consideration with the proposition that ''[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.' However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.'
9. His Honour further observed at [42]: 'The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent's responsible officers knew or ought to have known.'
10. I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK [2006] NSWCCA 272.
11. The Court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]-[18] (Latham J).
12. The defendant's duty required it to identify risks at the site and to adopt measures to eliminate or minimise them: s 17 of the Act; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at [34] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
13. The foreseeability of the risk was high, such risk being a risk that was created by the removal of the guard to the front blade and ram of the guillotine, which was done with the knowledge and approval of Epic's management.
14. The guillotine had been left in an unguarded state for an indefinite period of time, throughout which it was within the management and control of Epic.
15. I asked both Counsel appearing, how long had the guillotine been unguarded before Mr Mueller's accident, and who removed the guard. Neither Counsel could assist. That is correct. However, the prosecutor did not witness the accident nor was he on site, and can only find his evidence from witnesses. Michael and Mark Azzopardi were both present at the hearing via AVL, yet no assistance was offered as to who removed the guard and when. I can assume nothing from that.
16. The only evidence therefore with regard to by whom and when the guard was removed is to be found in agreed facts [20] and [24] as follows: '[20] The machine was, at the time of the incident, within the management and control of Epic. … [24] However, Mr Mueller had not been prevented - either by adequate supervision or otherwise - from using the machine.'
17. The guillotine was originally manufactured by Epic. It had been sold and then in 2017 it was bought back by Epic for repairs to be performed. Even though it was undergoing repairs at Epic's site, the guillotine had never been completely taken out of operation. Another contract worker, Mr Hestlow, had operated the machine on several occasions prior to the incident to cut and shear metal. Again, there is no evidence as to how many times Mr Hestlow had used the guillotine and over what period of time.
18. The risk of such a worker such as Mr Mueller inadvertently placing his fingers or hands under the blade whilst operating the guillotine was a foreseeable one. The unguarded blade of the guillotine was activated when Mr Mueller had turned away from the guillotine to move the foot pedal.
19. Employers must take steps to protect workers against risks created by inadvertent conduct of workers in the course of their work, if it is reasonably practicable to do so: SafeWork NSW v Poletti Corporation [2019] NSWDC 491 at [88] (Scotting DCJ).
20. The risk was actually known by Epic as demonstrated by the fact that Epic knew that the guillotine was originally fitted with the guard in front of the strike area of the blade and decided to remove the guard. In these circumstances, there was a substantial chance of the risk manifesting.
21. The guillotine was not tagged as being under repair or being refurbished. It was not isolated or locked out from the electricity supply and could be readily plugged into a power socket and used by a worker while it was left in an unguarded state.
22. Mr Mueller had no prior experience in operating the guillotine, nor had he been prevented from using the machine in its unguarded state, either through adequate supervision, instruction or otherwise. There was no safe operating procedure for the use of the guillotine that workers such as Mr Mueller were required to follow.
23. The gravity of the risk is demonstrated by the seriousness of the injuries suffered by Mr Mueller. The harm caused to him was significant. He was a young man who has been left with very serious physical injuries and limitations, having lost four fingers from his right hand and significant crush injuries to fingers on his left hand. His suffering must be immense.
24. However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: 'It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.'
25. There was a simple step obviously available to Epic, which was taken immediately subsequent to the incident, for the front guard of the guillotine to be kept in place at all times. The guarding was required by the Work Health and Safety Regulation 2017 (NSW), the Australian Standard and the Code of Practice.
26. Moreover, the front guard was readily available to Epic at all times, as it was kept at the site after being removed from the guillotine with the knowledge of Epic's management.
27. Epic should also, in compliance with its obligations under s 19(1) of the Act, have undertaken a written risk assessment so as to ensure that the guillotine was guarded whenever is was being operated at Epic's premises and also to ensure that any machinery at the site not intended for use could not be operated by a worker. This was done after the incident in response to an improvement notice issued by SafeWork NSW.
28. Another simple step Epic could have taken, and did so after the incident, was to prepare and implement procedures for the safe use of the guillotine which involved the guillotine being isolated and locked out from the electricity supply when guarding was not in place. Epic should have prohibited workers, including Mr Mueller, from operating the guillotine unless and until the guard in front of the blade was in place. This could have been achieved by effective supervision of Mr Mueller and the other workers.
29. All of these measures would have involved little effort and minimal cost, and this is a factor that increases the objective seriousness of the offending conduct.
30. The defendant in its written submissions concedes, appropriately, that for a machine of this nature to be unguarded, the risk of serious injury to a worker was obvious. They say, however, that the risk of someone using the machine in that unguarded state was not so obvious to the defendant and refers to the affidavit of Michael Azzopardi (Exhibit B) which states as follows: '[12] … I was in the factory when the accident occurred and I wish I saw what happened and could have yelled out to stop. The machine was in a separate part of the factory where the machines that needed repairs were kept and was under itself under repair. I totally unexpected (sic) that anyone would try to use it. It was unplugged and its hydraulics had to be operated manually for it to start. However, it is something Zak or any other worker should not have to go through. This was a tragedy and my whole family are very sorry and regretful of the whole incident.'
31. The defendant also submits that this is more a case of failure to supervise and as such should not be in the mid-range of offending. I disagree with that submission.
32. The evidence deposed to by Michael Azzopardi above, clearly demonstrates that there had been few, if any steps taken to ensure that the guillotine could not be accessed by workers. Moreover, the fact that neither of the Azzopardi gentlemen could say when the guard had been removed, by whom the guard was removed, how many times, if at all, Mr Hestlow had used the guillotine prior to Mr Mueller's incident shows that there was virtually no supervision at all in the workplace.
33. This was a dangerous piece of plant, originally built by Epic, which they had bought back to repair. They well knew of the risks and dangers associated with the guillotine's use in the state that they had allowed it to be in, with the guard removed. Such a risk was clearly foreseeable, and Epic ignored its work health and safety obligations, in many ways as detailed above, including supervision of its workers.
34. Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).
35. The objective seriousness of an offence under s 32 of the Act is considered in the context of the graduation of offences contained in ss 31-32 of the Act: Nash v Silver City Drilling at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include:

• The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Ibid [34];
• The availability of steps to eliminate or minimise the risk: Ibid [53];
• Whether those steps are complex, burdensome or mildly inconvenient if mitigating steps could easily have been taken, the offending will be more serious: Ibid [53];
• Whether the risk was known or ought reasonably have been known to or identified by the offender;
• Whether the risk was an obvious or clear one; and
• The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ).

1. The defendant also submits, and is accepted by the prosecutor, that there was little risk of death in this instance. I have taken that into consideration in coming to my determination.

DETERRENCE

1. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.
2. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the Court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).
3. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.
4. The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which said: '[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. '[75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.'
5. General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry's attention to the consequences of inattention and the need for greater concentration on the potential risks associated with working in an environment where the use of dangerous plant and equipment occurs regularly.
6. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the Act very seriously. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors.
7. Conduct such as the defendant's must be denounced as the exposure of workers to the potential risk of serious injury or death as a result operating an unguarded guillotine sustaining significant and long lasting injuries, requires that the message of work place health and safety be front of mind to all employers at all times.
8. General deterrence must be approached, in my view, in the context of the industry in which the defendant operates. The types of activities, as well as the broader hazards and risks associated with the manufacture and repair of metal cutting guillotines and presses used in the sheet metal industry, and providing general metal engineering services, to my mind exhibits that the defendant operates in an inherently dangerous industry.
9. In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend.
10. I accept that Michael Azzopardi's affidavit (Exhibit B) demonstrates that in the period subsequent to the incident, the defendant undertook a number of steps to improve safety in response to the incident.
11. I note that the defendant continues to perform the same work in the Australian Metal working industry as it did when the incident occurred. Its operations involve manufacturing and refurbishing heavy industrial guillotines and presses for the sheet metal industry and continuing to engage workers to operate the heavy machinery.
12. The agreed facts indicate that Epic was able to rectify the situation in respect to the machine quickly after the accident. The guard was refitted to the front of the guillotine on the day the accident occurred. The guard was secured by an Allen key. Epic effectively prohibited the operation of the guillotine by its workers following the incident. The guillotine was disconnected from the power, locked out and fitted with signage that stated words to the effect: 'Do Not Use'. A chain was also placed across that part of the site where the guillotine was kept, with a sign stating: 'Authorised Admittance Only'.
13. Nonetheless, Michael Azzopardi's affidavit is silent as to what steps, if any, were taken after the incident to ensure as reasonably practicable the safety of workers in the workplace. In particular, there is no evidence that Epic have reviewed their systems to ensure that there is proper supervision of its workers at all times. However, I accept that Epic and the Azzopardis have been impacted by this event and have been very distressed as a consequence.
14. I accept that the prospects of rehabilitation of the defendant are reasonable, but the need for an element of specific deterrence is necessary in these circumstances.

AGGRAVATING FACTORS

1. The injuries sustained by Mr Mueller were serious as detailed above. Four fingers from his right hand were crushed. They were completely amputated as a result of the incident. Additionally, the tips of Mr Mueller's index and middle fingers on his left hand were badly crushed, and no doubt these injuries will significantly affect his life on an ongoing basis: s 21A(2)(g) of the Sentencing Act.

MITIGATING FACTORS

1. The defendant has no previous convictions and the prosecutor fairly concedes that this is a matter that can be taken onto account as a mitigating factor. To my mind, noting the defendant has operated in an industry which is inherently dangerous, this is a significant mitigating factor: ss 21A(3)(d) and 21A(3)(e) of the Sentencing Act.
2. The defendant co-operated with the SafeWork investigation: s 21A(3)(m) of the Sentencing Act.
3. The defendant has significant ties to the community and has provided significant assistance to local high school students and people with disabilities to train in metal work and this is to be commended. This has enabled many people to go on to have successful careers based on the training and assistance provided by Epic. Epic has also been involved in charitable works, and is clearly a good corporate citizen, for which it is entitled to some leniency: s 21 A(3)(f) of the Sentencing Act.
4. I accept that the defendant has reasonable prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act.
5. The prosecutor concedes, and I accept that the defendant through Michael Azzopardi, has shown remorse and contrition and as such is entitled to leniency on that basis: s 21A(3)(i) of the Sentencing Act.
6. The defendant entered a plea of guilty early, and the prosecutor submits it is open to me to find that the defendant is entitled to the maximum discount on that basis, thus I will allow the deduction of 25% for the utilitarian value of the pleas in accordance with the principles set out in R v Thomson (2000) 49 NSWLR 383: s 22 of the Sentencing Act.

CAPACITY TO PAY

1. The defendant has raised the issue of its ability to pay any fine due to its financial circumstances. The financial circumstances of Epic are described in Exhibit B and a Profit and Loss Statement for Epic and a Balance Sheet for the 12 months ending 30 June 2020 were tendered and became Exhibit C.
2. I accept that the Covid-19 pandemic is having an impact on the defendant as it is on so many other businesses and persons all over the world. I also note that the defendant has been in receipt of significant government assistance by way of Job Keeper and a Rural Assistance Loan. Nonetheless, an examination of the financial records suggest that while there may be some difficulty in paying a significant fine, the company is still viable and is increasing its turnover moving forward. I have allowed some leniency on the basis of the difficulty the defendant may have in paying a fine.
3. Having said that, the objective seriousness of the offence is such that it must be reflected in a significant fine. I accept that the defendant has reasonable prospects of rehabilitation. Give the seriousness of the offence, a fine must be imposed to send a message to employers that they must take their obligations to protect their workers from a risk of injury very seriously. To reduce the fine significantly would not provide the level of general deterrence that is expected, nor specific deterrence given the risk that Mr Mueller was exposed to.
4. The Court is entitled to take into account the fact that the defendant will be liable to pay the prosecutor's costs when considering any monetary penalty to be imposed on the defendants, particularly in circumstances where there is evidence of a limited capacity to pay a fine. The costs payable to the prosecutor are an important aspect of the punishment of the defendants. The Court can also have regard to the defendant's own costs that it will have to bear as a consequence of a breach of the Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78] (Kirby J, Mason P and Hoeben J agreeing) . I have also taken into account that the defendant will be liable for the prosecutor's costs as part of the overall penalty imposed, and I have exercised some leniency on that basis.
5. The appropriate fine for the defendant is $200,000.00. The defendant is entitled to a discount of 25% for the early plea.

PENALTY

1. I make the following orders: 1. The defendant is convicted. 2. The appropriate fine is $200,000.00 and that will be reduced by 25% to reflect the early plea. 3. Accordingly, I order the defendant pay a fine of $150,000.00. 4. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 5. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW) the defendant is to pay the prosecutor's costs agreed in the sum of $43,247.20.

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